P18Ventures Announces a Special Business Continuity Fund for P18Alumni

Since before there was a government-issued lockdown in Puerto Rico, home to all of our operations, we made two tough but timely decisions: the remaining Gen.7 curriculum would be virtual, as well as their DemoDay, and our upcoming Gen.8 would be purely Puerto Rican. The setting of that meeting was kind of similar as when we decided to pause our fourth cohort after hurricane Maria. However, this time we were ready to think about ways of moving forward fast.

We knew that a smaller cohort meant we were going to have some budget available and deciding what to do with it was a no brainer. Our alumni would need our support now, more than ever. Not only with connections and mentors but with an investment vehicle that would help them keep their operations and their growth since we knew the negative impact of the pandemic in the economy would keep growing all around the world, reducing investment opportunities.

So we decided to design a special business continuity investment fund curated to support our alumni, and we called it the P18Ventures Business Continuity Fund. Already announced to our alumni, the investment portfolio will be under our follow-up fund subprogram, led by our Operations Director, Lucas Arzola.

How will it work

Every P18 startup that has successfully completed our 5-month acceleration curriculum in good standing is eligible to receive said fund. However, we’ll be taking a closer look at the companies that maintain operational or commercial ties to Puerto Rico.

Once the application and selection process is done, the program will grant equity-based investment financing for capital and operating costs, using the P18Ventures infrastructure without the need for matching to an ongoing investment round. With this, we expect to support a target of 41 companies with a US $25K investment using a standard convertible note. It is worth noting that this fund does not affect the US $450K annual budget for our follow-up fund, which companies fresh out the program can still apply to.

Applications will be reviewed by the P18Ventures committee, including parallel18 leadership and a representative from our parent organization, the Puerto Rico Science, Technology, and Research Trust (PRSTRT), during early June. While applicant companies will be evaluated on a rolling basis until funds are deployed, our goal is for this to happen as soon as possible.

This way, companies that benefit can make use of the funds right away to weather the challenges of an increase or decrease in demand due to the current situation, or a modification of their business model.

What we want to achieve

In Puerto Rico, the total economic impact of COVID-19 following the government issued lockdown is estimated to be around US $3B to US $10B, according to a report published in the early days of lockdown. That’s only from lost salaries and interrupted tourism activity.

Now, of course, the impact goes beyond the island. A study by Startup Genome showed that US $28B in startup investment will disappear this year. This represents an astonishing decrease in liquidity that will bring significant hardship to the type of ventures we support in terms of funding and growth.

It is within this framework that, along with our parent organization the PRSTRT, we’ve decided to solidify our commitment with underrepresented entrepreneurs in the form of the Business Continuity Fund. Our mission? To do so by providing immediate investment capital, which is becoming even more important as capital markets shrink, access to funding becomes limited, and operations for other ecosystem supporters are impacted.

To our alumni

If you’re an alumnus in need of immediate investment and you did not receive the email and want information about this, please let us know and we’ll help you out. We are doing our best to walk the talk as we strive to continue moving forward through our team, our startups, our parent organization, and the community that surrounds us. All the while, our compass remains pointed towards providing all the best business and growth opportunities to underrepresented entrepreneurs, both locally and globally.